Sports hydration is currently a ‘key white space category’ for KDP, the company says, as it signs the agreement with Grupo PiSA.
While KDP has been extending beyond its stronghold of soda and coffee, the sports hydration category has long been dominated by PepsiCo’s Gatorade and Coca-Cola’s Powerade and Bodyarmor. Announcing the long-term sales and distribution agreement this morning, KDP champions Electrolit as a 'differentiated brand with tremendous consumer appeal'.
Fast-growing brand
Electrolit, meanwhile, will benefit from ‘significant expansion’ of its distribution and continued growth.
Leveraging a 70+ year history and leading market position in Mexico, Electrolit entered the US market in 2014.
Since then, it has grown to become a top 5 trademark in the sports hydration category, which, at approximately $11bn in US retail sales per IRI, represents a large and growing segment within liquid refreshment beverages.
With its ‘great taste, premium ingredients and scientific formula’, Electrolit is growing at a strong double-digit rate in the US, where it already generates more than $400m in retail sales and has increased more than ten-fold over the past five years.
The flagship formulation of Electrolit contains 6 ions for electrolyte absorption; magnesium, potassium and calcium; sodium-glucose and sodium lactate. The company also offers a zero sugar version.
Earlier this month, the brand debuted ‘electrolyte-packed’ Electrolit Powders’ at the NACS show in Atlanta: the ready-to-mix powders are formulated with glucose and five ions.
Under the partnership, KDP will sell and distribute Electrolit in the vast majority of KDP's company-owned direct store distribution territories and across all channels of trade.
“Building on its Hispanic heritage and regional strengths, Electrolit has a long runway for growth among a broad multi-cultural consumer base as KDP enhances its distribution nationwide,” says KDP.
Portfolio expansion
"Today we announced our expansion into sports hydration through a new and exciting partnership with Grupo PiSA for Electrolit," said Bob Gamgort, CEO.
"Over the past 12 months, we have established new growth platforms in sports hydration, energy and RTD coffee by partnering with compelling brands and leveraging our unique distribution assets across both cold and hot beverages to attract strong partnerships."
Best known for the soda and coffee portfolios gained by the merger of Keurig and Dr Pepper Snapple in 2018, KDP has been extending intro new, on-trend categories.
That includes the 2018 acquisition of premium enhanced water company Core; the 2017 acquisition (via DPS) of antioxidant infusion drink Bai; and the 2020 acquisition of sparkling water brand Limitless.
Dr Pepper Snapple previously had a 15.5% stake in Bodyarmor: but lost out to Coca-Cola which ultimately acquired the brand in full in 2021.
Andrew Archambault, President – Commercial & Beverage Concentrates at KDP said, "We are thrilled to enter the sports hydration category with Electrolit, broadening our portfolio to address this important beverage occasion for our consumers.
"Electrolit is a differentiated brand with tremendous consumer appeal, and KDP's proven sales and distribution capabilities are poised to unlock its significant growth potential."
While most sports drinks target athletes and workouts, Electrolit has set its target wider with 'a scientifically formulated premium hydration beverage that replenishes the body after physical activity, intense heat, or a night of partying.'
Electrolit is manufactured and owned by Pisa Pharmaceuticals, the largest pharmaceutical company in Mexico and Latin America.
Caridad Ochoa, President and Chief Executive Officer of Electrolit USA, said: "We look forward to a highly successful alliance and partnership between our companies. KDP is the right strategic partner to further expand Electrolit's footprint in the U.S. KDP's scale, capabilities and insights, coupled with Electrolit's rich heritage and loyal following, will drive the next stage of our determined growth initiatives."
The transition of Electrolit distribution to KDP will occur in early 2024. Other terms of the agreement have not been disclosed.